IntroductionThe economic globalization is a gradual active process of regulatory steps and trends towards the establishment of a unified global market, unbounded by tariff or non-tariff barriers and unrestricted by state borders. Multinational enterprises are the forefront vanguards of this process. Since the beginning of the Industrial Revolution in the 18th century, international business activities have had a paramount impact on previously exclusively state-reserved rights like fiscal policies, political and economic strategy formation, national and international legislative initiatives and even the formation of security alliances. Nevertheless, the uneven development level of countries across the globe has caused controversies in multiple aspects related to multinational corporate operations, primarily in the closely related terms of Foreign Direct Investment and international trade. Cases of violating human and civil rights, shady lobbyism and pressure on state authorities, aggressive exploitation of socially and economically disadvantaged groups, unsustainable and environmentally endangering management of natural resources on foreign territory and others have arisen suspicion that multinational enterprises rarely, if ever, adhere to high conducts of ethical relations with all stakeholders.

TheoryThe strategy and influences for an ethical multinational enterprise foreign direct investment are inherently derived from the entities’ relations with its stakeholders. The scope of business ethics (which are a form of applied ethics) is gigantic, ranging from the ultimately ontological aspect of the existence of business in any form and the optimal structural paradigm of society, to notably more concrete and of greater applied value fields such as ethics of finance, HR, technology, and international business. Post-structuralism and postmodernism have expanded the ideas of thinkers and philosophers such as Virginia Woolf, James Joyce and Roland Barthes to conclude that the modern world is relational, thus the ultimate verdict on ethical behavior should take into account the multi-facetted relations with a myriad of stakeholders, rather than intolerantly assume a single narrow viewpoint.

Before embarking on the task to clarify ethical issues related to FDI, it is rather important to establish a general theoretical framework of the FDI and international trade processes. Currently, both are governed and supervised by the World Trade Organization. According to WTO’s corporate history (WTO, n.d.) it was established on January 1, 1995 under the Marrakech Agreement, assuming the position and responsibilities of the General Agreement on Tariffs and Trade (GATT). In recent years, the bulk of WTO’s efforts and attention has shifted from the policies undertaken during the Uruguay Round (ones straining to foster the adaptation to a new globalizing world, agreements centered onto crystallizing and facilitating trade in services, intellectual property, dispute settlement, etc) to the more strategic current Doha round. However, in a speech for the WTO Public Symposium, the Vice Principal of the London College of Management Studies, Dr. Palto Ranjan Datta (2003) argued that the claim of proponents of a WTO investment agreement to “help stimulate long-term foreign investment in poor countries, stabilize capital flows, and strengthen the WTO system” is unfounded and “if industrial countries want to promote investment in developing countries, they should use the Doha round to create the right conditions by opening their markets, eliminating agricultural dumping, and reforming the TRIPs agreement”. The strategy of multinationals should take into account at least in a tactical plan the moves of the international community with regard to liberalization of markets and possibly undertaking efforts towards instituting new FDI and trade trends. There is also a common misconception about the factual state of FDI value dispersion across the...

You May Also Find These Documents Helpful

...had attracted modest FDI in niche sectors such as tourism, herbal products, mineral deposits (lime stone), and light manufacturing apparel; hydro power and that it had positive impacts on exports, particularly garments. FDI has also enabled the country to export non- traditional manufactured products such as micro-transformers and personal consumer products (UNCTAD, 2003b). Investment was mainly in low-technology, labour-intensive production. The impact of FDI had also been modest, primarily in job creation. According to the study, FDI inflow was constrained by political instability, outdated foreigninvestment law, rigid labour regulations and poor physical infrastructure. This situation remains current due to political instability and political transition.
FDI is considered beneficial in view of its contribution to technological transfers, enhancement of managerial capability and new opportunities for market access. FDI, particularly in the form of equity investment, adds to the capital stock of the country and thus enables the recipient country to achieve faster economic growth through momentum in capital formation. Increases in FDI are also seen as leading to increases in exports by creating international markets through new marketing and organizational skills.
The inflow of FDI in Nepal began in the...

...﻿Executive Summary
ForeignDirectInvestment is one of the vital force to boost up the economy. In this project report I would like to draw a current scenario of ForeignDirectInvestment in Bangladesh. In this regard I present the most updated data, avoid the uncompleted data and use the best judgment at the time of presenting the data to better knowing the current trend about the ForeignDirectInvestment in Bangladesh.
I prepared an overview of “ForeignDirectInvestment in Bangladesh” based on secondary data and information. For this specific purpose I collected data and information from various sources like published materials such as the Bangladesh Economic Review, Different articles of Board of Investment (BOI) and Bangladesh Export Processing Zone (BEPZA), Daily Statement of Affairs of different Internet based publication and other books on ForeignDirectInvestment in Bangladesh and articles related to ForeignDirectInvestment in Bangladesh. I furnished the full contents of the report in eight chapters. I concentrated on arranging and putting the data in such a way that the report progressively anchors to a desired destination of understanding.
Introduction Part-1
Investment has...

...to critically analyze why foreigninvestment appear to be more productive than domestic investment and to give the advantages and disadvantages of a less developed countries dependency on foreigndirectinvestment. The paper will start by giving the definitions for major concepts in the question. Secondly, a critical analysis of why foreigninvestment appear to be more productive than domestic investment will be given followed by advantages and disadvantages of a developing country dependency on foreigndirectinvestment. Lastly, a conclusion will be drawn.
Foreigndirectinvestment (FDI) is defined as a long-term investment by a foreigndirect investor in an enterprise resident in an economy other than that in which the foreigndirect investor is based (Economy Watch: 2010). The FDI relationship consists of a parent enterprise and a foreign affiliate which together form a transnational corporation (TNC). In order to qualify as FDI the investment must afford the parent enterprise control over its foreign affiliate. The United Nations defines control in this case as owning...

...where everyone has to follow the same rules. The legal system does however have court systems where you can argue your case to a point.
As far as diving in to the Ethiopian market and making a big investment I would have to say that is a terrible idea. The first issue is that the countries government is one of the youngest in the world, which means it still has quite a large possibility of unrest at any moment. There is also the fact that according to many sources the country is very corrupt on many levels meaning it could millions if not hundreds of millions of dollars to bribe your way into the market. There is also the fact that they are still in a very shaky situation with their neighbors to the east in Eritrea and have many problems to solve there. Also their border to Somalia is a frightening concept as well because of the unrest in Somalia as well. The only other two nations bordering Ethiopia are fairly developed and Kenya being to the south could be some sort of a helpful trading partner being the closest fully developed nation. However being surrounded with all of this unrest and being a young country with a struggling economy with a very small industrial sector and a very complex ethnic make up I would have to say that I would rather not make a foreigndirectinvestment in Ethiopia.
...

...Factors Affecting ForeignDirectInvestment Location in the Petrochemicals
Industry, the case of Saudi Arabia
By
Fawaz Binsaeed
0531820
BBS Doctoral Symposium 23rd & 24th March 2009
1
Factors Affecting ForeignDirectInvestment Location in the Petrochemicals Industry,
The case of Saudi Arabia
Abstract
ForeignDirectInvestment (FDI) is an important source of capital and economic growth
in developing countries. It provides a package of new technologies, management techniques,
finance and market access for the production of goods and services. However, attracting FDI is a
major challenge for host countries as it faces the challenge of identifying the major factors that
motivate and affect the FDI location decision. After reviewing the literature we identify the most
important major location factors for FDI, which are the cost factors, market factors,
infrastructure and technological factors, political and legal factors, and social and cultural
factors. However, the previous studies lack the focus on the complexity of the relative important
of the location factors to a specific industry and specific country. Therefore, this study will fill
the previous studies gaps by studying the relative important of location factors to the
Petrochemicals FDI located...

...positive and
negative effects of FDI
inflows
Ing. Tomáš Dudáš, PhD.
Possible positive effects
FDI provides capital which is usually missing
in the target country
Long term capital is suitable for economic
development
Foreign investors are able to finance their
investments projects better and often cheaper
Foreign corporations create new workplaces
Possible positive effects
FDI bring new technologies that are usually
not available in the target country.
There is empirical evidence that there are spillover effects as the new technologies usually spread
beyond the foreign corporations
Foreign corporations provide better access to
foreign markets
Ex. Foreign corporations can provide useful
contacts even for their domestic subcontractors
Possible positive effects
Foreign corporations bring new know-how and
managerial skills into the target country
Again, there is a spill-over effects – as people leave the
corporations they leave with the knowledge and know-how
they accumulated
Foreign corporations can help to change the economic
structure of the target country
With a good economic strategy governments can attract
companies from promising and innovative sectors
Possible positive effects
“Crowding in” effect
The foreign corporations...